Africa’s rising debt risks derailed economic growth

By O’Brien Kimani

Kenya has been cited as one of the countries that will drive growth in Africa with the economy projected to expand by 5.4 percent this year.

At the same time, the international monetary fund says sub Saharan Africa is expected to see a marginal growth of 3.2% in 2018 and 3.5% in 2019.

IMF managing director Christian Lagarde has however warned that rising debts in many African countries risk derailing this growth.

She was speaking during the ongoing World bank/IMF spring meeting in Washington.

The international monetary fund says seven countries being Kenya, Mali, Rwanda, Senegal, Tanzania, Côte d’Ivoire and Ethiopia continue to exhibit economic resilience, supported by domestic demand, posting annual growth rates of above 5.4% in 2015 to 2017.

These countries house nearly 27% of the region’s population and account for 13% of the region’s total GDP.

IMF however says there is a need to implement reforms that will help increase the productivity of African workers and create a stable macroeconomic environment.

Lagarde says better and more productive jobs are instrumental to tackling poverty on the African continent.

She has however raised concerns over rising debts in many African countries brought about by sovereign bonds noting that they could overload their economies with too much debt raising default risks.

The IMF has also revised upward its forecast for global economic growth in 2017 from 3.1 per cent in 2016 to 3.5 per cent in 2017 and 3.6 per cent in 2018.